How Shop.ca tapped an enterprise solution to sell more SKUs than Wal-Mart

On stage at IBM Connect, Big Blue’s marquee social enterprise conference in Orlando, Sandy Carter presents success stories from large enterprise customers using IBM’s WebSphere Commerce solution – the most-used e-commerce platform of the top 100 retailers counts Sears, Nokia, Ikea, Sony, Canon, Staples, and Mazda among its customers.

But one example, albeit briefly flashed on the massive screen displaying the presentation of Sandy Carter, vice-president of social business evangelism at IBM Corp., is not like the others. Shop.ca appears alongside the enterprise-grade customers and is credited for boosting its sales by using a customer loyalty program. But Shop.ca isn’t a multi-national retailer with thousands of employees – it’s a Toronto-based startup now counting 34 staff, and not even a year old after launching in July 2012. But it’s already Canada’s largest online shopping destination, offering SKUs than a Wal-Mart store by a wide margin. Shop.ca added 450,000 new products to its database in the fourth quarter of 2012, while a typical large Wal-Mart store sells around 120,000 products. In total, Shop.ca offers in the ball park of 15 million products.

To adopt a solution used by mega-retailers, Shop.ca approached IBM as a strategic partner nine months before it opened its doors, says Shop.ca CEO Trevor Newell. The early core team at Shop.ca had deep IT experience that would go into creating the e-commerce platform, which was months in development. Newell, for one, had previously worked with enterprise software firms Oracle Corp., Siebel Systems Inc., and Janna Systems Inc.

The IT solution was key to Shop.ca’s vision of presenting multiple brands in one storefront and selling customers items from multiple vendors in one shopping cart, with the shipping process coming together in the background. Adding a loyalty program that would give customers cash back on their purchases and the purchases they recommended to friends was the next step, a feature the Shop.ca team built out in WebSphere Commerce.

“Canadians love to share online so we created something called the social loyalty program,” he says. “It created a gamification and badging system that allows you to earn more of those rewards.”

WebSphere Commerce also has Toronto roots, being built out of the IBM lab there ahead of its launch in 1996. James Fong was a part of that team, and is the product manager of WebSphere Commerce for IBM today. He says the software provides everything a retailer would need to start selling inventory online. It includes the database for what you’re selling, allows you to create marketing materials around it, gives customers a way to check order status and automatic calculations of shipping and taxes. But while the automation is there, it’s also flexible enough to be customized by the business.

“It’s a mix, we have strong business users tools and we also have a way to programmatically extend the service,” he says. “We’re focused on a scalable e-commerce platform that can build out that bigger solution.”

The capabilities in black are the ones offered by WebSphere Commerce. (Image: IBM Corp.)

Shop.ca used its IT team to build out a loyalty rewards bank. It includes a currency system with credits and debits guided by a rule set. It rewards users when a friend buys something they recommended with a 1 per cent commission. So far, the program has awarded more than $3 million to member’s accounts.

The e-commerce site also integrated Pluck, an engagement platform from Demand Media, that allows user to register on the site using existing social media profiles. It’s an alternative to having a user register with an e-mail address and then fill out several fields of information. It also helps gel the loyalty program that’s so important to Shop.ca’s business.

“It’s one of the reasons we exist and in our six months we’re seeing strong loyalty,” Newell says. “To oversimplifiy it, people are buying form us every other month. So we’re really happy with how the loyalty program is working.”

It’s unique how much Shop.ca has built with WebSphere Commerce compared to other customers, Fong observes. Shop.ca also had help from an IBM partner to assist with the work. But a key part to its ability to quickly grow its product database and customer registrations was the software’s ability to handle Web server caching.

“You want to be able to cache the viewing of a product, because it’s not personalized for an individual,” Fong says. “When you have such a large catalogue, you have customers spread out across that catalogue.”

Since Shop.ca offers so many products, Web pages for each individual item don’t already exist, waiting for visitors. Instead those pages are created when a customer calls for the item from the database. But once they are created, the pages are saved for the next person that wants to view that item, so the load times are faster.

It’s one of the reasons Shop.ca has become the fastest growing e-commerce site in the country. Shop.ca’s Supplier World portal for its clients also helps, allowing for its product sources to load their products into the online mall via XML feeds or even spreadsheets.

“Companies like Wal-mart launched 400 new SKUs in all of Q4,” Newell says. “Our ability to onboard 10,000 new products every week is a real scale of efficiency that we’re proud of.”

With growth at that pace, expect Shop.ca to be featured on stage for an even longer amount of time at future IBM conferences.